Friday, March 23, 2007

Some Late Thoughts on Budget

Reading the Newspapers after the event, I'm firmly of the opnion that the Conservatives and their supporters, are going down the wrong path in attempting to paint Gordon as an unreformed old-Labour socialist.If they are going down that path they will have to explain to the public how a supposed socialist reduced income tax twice, and has now reduced corporation tax.

Now, don’t get me wrong, the budget is all smoke and mirrors.The tax reductions were measly, and will be more than cancelled out by the other increases, especially the National Insurance increment.But this was classic New Labour: panem et circem, headline-grabbing, single-mum sponsoring and, most of all, a lot of hot air which will make little difference to the overall fiscal picture.The problem is, they have been doing this, succesfully, for ten years.The media, especially the Sun, are still lapping it up, as their front page focused extensively on the 'cuts', whilst ignoring the rises.

If the Conservatives want to beat Gordon Brown's New Labour they need to paint Brown as a hammerer of the non-pensioner, non single-mother poor.Surely, by painting him as an old style socialist, the Conservatives give him the chance to play the ‘man-of-the-people’ card, when, in fact, that's something he is definitely not.

As for the rest of the budget, well, the logic of it confused me somewhat. For instance, why was corporation tax reduced, whilst small businesses have seen a tax rise to 22%?Surely, the ‘enterprise culture’ Brown desires relies on the very same small businesses prospering.And, we’re in a situation where many large corporations have recorded record profits – which makes the need to help them hardly pressing.

Green and cigarette taxes are politically a winner. But I’d imagine that a lot of the Mums who have gained with the child-benefit increase, will be the big losers if they’ve recently purchased a gas-guzzling vehicle.If that isn’t the definition of giving with one hand and taking with the other, then I don’t know what is!

Then there’s the crux of the matter: how does this budget affect me?Well, I am, as a single childless-man earning less than £19,000 a year, in effect worse off.The Lib Dems said that people like myself will be ‘subsidising the rich’, more than likely, however, it will be child-benefit and tax credit receiving single-mothers, who will be the ones who gain from my pain.How I can - despite having that thought in my mind and after working a 45-hour week - contain myself from foaming at the mouth with anger, I’ll never know.

Finally, we have a 2p petrol increase, although it will be frozen for six months.So, to say that he has tried to keep ‘inflation and interest rates under control’ seems ludicrous.The price of oil is volatile, and if it increased to the mid-60s or even early-70s in the summer, coupled with this Increase would set the inflationary cat, already on the verge of escaping, free.If that happens then it wouldn’t just be the likes of me who are worse-off, because everyone feels the pain of stagflation.